The business lesson in Tiger Woods' big comeback: Rebuild, don't replace
A Boeing 737 Max approaches during a display flight presentation on the opening day of the Farnborough International Airshow (FIA2018), in Farnborough, Britain, July 16, 2018. EPA-EFE/FILE/ANDY RAIN
By John D. Stoll
New York (USA), Apr 20 (efe-epa).- Longtime airplane executive Alan Mulally took the wheel at Ford Motor Co. in 2006 asking the type of questions you'd expect from an outsider, according to a Dow Jones Newswires report made available to EFE on Saturday.
Among the most pressing: Whatever happened to that aerodynamic family sedan named the Taurus?
The Taurus reinvigorated Ford in the 1980s but was killed after a botched redesign relegated it to rental-car status.
In its place came the Five Hundred, a bulbous automobile as unloved as it was unknown.
Mulally wanted Five Hundreds renamed Taurus and charged engineers with a necessary overhaul.
If Mullaly's hunch that it's bad business to discard a brand that cost decades and millions of dollars to build seems sound, that's because it almost always is.
Unless you're United Kingdom-based Marks & Spencer, which had to change its "Isis" perfume to "Aqua," or a search engine called "David and Jerry's Guide to the World Wide Web" (appropriately renamed Yahoo!), branding experts say dance with the one that brung ya.
This is tough advice to follow when a product misstep or corporate scandal threatens to obliterate your prom date.
Lululemon Athletica Inc. made yoga pants popular, but that didn't stop questions about whether the brand could withstand its see-through leggings problem.
Chipotle Mexican Grill Inc. is a fast-casual dining pioneer, but many wondered if E. coli outbreaks would kill demand for foil-wrapped burritos.
Stock prices swooned, public outrage swelled. As of 2019, however, those two brands are back, and their stocks are near their all-time highs.
As much as we enjoy kicking failures while they're down, we also love redemption. Boston Consulting recently studied 11 companies it dubbed "Comeback Kids," and found investors disproportionately rewarded turnaround success stories.
The latest product that's seen its reputation suffer is Boeing Co.'s 737 MAX. On Monday, President Donald Trump ramped up pressure in a tweet, saying that if he ran the company, he would fix it, add features and rebrand the plane with a new name. "No product has suffered like this one," he wrote.
Boeing is racing to repair 737 MAX planes grounded after two fatal crashes led passengers to say they didn't want to board them.
John Deighton, teaching at Harvard Business School, said that after news of the second MAX crash broke, "we all looked at our tickets and said 'these planes have a big problem.'"
The professor, who studied the decline and resurgence of Snapple fruit drinks, agrees Boeing has a tough to-do list - but says a name change shouldn't be on it. "This incident transcends the naming of a plane," he said. People want a safe plane. "Do the work."
Consider another development from the past week that Trump took note of. Tiger Woods notched his first major golf victory since 2008, and the president tweeted to congratulate him on his once-unthinkable "comeback."
Woods is not a product. However, much like Michael Jordan, his name is bought or sold like a can of Coke.
Consider how cyclist Lance Armstrong's cancer foundation had to become Livestrong after its founder's doping scandal.
Likewise, when Woods' career tanked in 2009 amid sex scandals and physical ailments, many sponsors dropped him like a tainted burrito.
Nike Inc. executives, who dumped Armstrong for misleading the public, didn't bail on Tiger, Dow Jones added in a report made available to EFE.
On Sunday, as Woods played the final round of the Masters tournament, the company finally reaped the dividends of having stuck by the humbled athlete. Because the swoosh logo was sprinkled on Woods' clothing from head to toe, it spent hours in front of cameras, earning an estimated $22.5 million worth of television exposure, according to analysis done by Apex Marketing Group Inc.
Over nearly a quarter century, Nike paid Woods hundreds of millions in endorsement deals. It crafted a Tiger Woods logo designed to be as distinctive as the Air Jordan silhouette, for instance.
Dropping him would have been equivalent to killing the Taurus (Ford, by the way, again scrapped the iconic car a few years after Mulally retired).
Stephen Brown, a marketing professor at Ulster University, outlined in "Brands and Branding" why investing in tarnished of brands is so important. His research indicates brand names typically make up at least a third of a company's value. Analysts often scour corporate filings to gauge the health of a company's trademarks.
When things go south, investors are rattled. For instance, Kraft Heinz wrote down the value of recognizable brands in February, such as Oscar Mayer cold cuts, by $15.4 billion, and its market value declined by 27 percent.
Still, given how much it costs to create a household name, it could be more efficient to resurrect Oscar Mayer than find a replacement.
One of the sponsors that dropped Woods back in 2009 was Accenture. They started out life as Andersen Consulting and know a little something about rebranding.
Accenture's advent came after an international arbiter ruled Andersen Consulting needed to break from its sister company, accounting firm Arthur Andersen.
The success of the identity switch is debated in marketing circles, but the $100 million price tag for just the first year of the rebranding campaign was undeniably steep. Not long after, Arthur Andersen was caught up in the Enron Corp. scandal and evaporated; Accenture escaped that tarnish and endures.
These days, advertising experts have new rebrands to debate. Weight Watchers recently simplified its name to WW. Dunkin' Donuts is suddenly just Dunkin'.
Boeing's fix is far more complicated than donuts and diets, Deighton said. "It gets to the heart of something tangled in our fear of big data and the tech revolution and so many things in our lives where we feel a lack of control."
It's not unlike our distrust of Facebook Inc.'s mishandling of data, Tesla Inc.'s alleged mislabeling of its Autopilot semi-driverless car system, or Uber Technologies Inc.'s corporate policies, he said. This stuff angers us, but we forgive.
Facebook's problems led to a backlash, but it didn't ultimately drive us to ditch the social network, according to a new Pew Research Center survey. Protests like the #deleteuber campaign that followed public outrage over the ride-hailing company's response to immigration policies led hundreds of thousands to stop using Uber at the time, according to a federal filing. But longer-term user growth has been eye-popping, with the number now equaling 91 million people.
Boeing and its troubled MAX planes will be forgiven. "People will be rooting for you and wanting you to recover," Deighton said, even if that sentiment comes with some reluctance. I'd just like to be on the second plane that takes off instead of the first."